Tax query on extending a lease

[elh43]

What is a landlord's tax liability on extending a lease. I assume the premium paid is taxable under Capital Gaints Tax. Is this the only liability, and is this affected by the fact that the landlord also "receives" the surrender of the old lease in consideration for granting the new lease?

[jeffrey]

L must have first acquired the freehold reversion etc. out of which the leasehold extension is to be granted, so the acquisition costs are definitely offsettable against the gross 'gain'.

The only 'gain' is the extension premium. This already takes into account T's existing leasehold which will be surrendered- otherwise the premium would be the sale price (on the open market) for a new lease of a vacant flat.

[sgclacy]

What is a landlord's tax liability on extending a lease. I assume the premium paid is taxable under Capital Gaints Tax. Is this the only liability, and is this affected by the fact that the landlord also "receives" the surrender of the old lease in consideration for granting the new lease?


If the lessee seeks a lease extentsion under the Act the landlord can roll over the capital gain